“Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we.” - George W. Bush

Tuesday, April 02, 2013

While the United States has committed many errors, the fragmentation of Europe and the weakening of China mean the United States emerges more powerful, since power is relative…The United States defeated the Soviet Union in the Cold War because of its balanced power. Europe and China defeated themselves because they placed all their chips on economics. And now we enter the new era.

An era ended when the Soviet Union collapsed on Dec. 31, 1991. The confrontation between the United States and the Soviet Union defined the Cold War period. The collapse of Europe framed that confrontation. After World War II, the Soviet and American armies occupied Europe. Both towered over the remnants of Europe's forces. The collapse of the European imperial system, the emergence of new states and a struggle between the Soviets and Americans for domination and influence also defined the confrontation. There were, of course, many other aspects and phases of the confrontation, but in the end, the Cold War was a struggle built on Europe's decline.

Many shifts in the international system accompanied the end of the Cold War. In fact, 1991 was an extraordinary and defining year. The Japanese economic miracle ended. China after Tiananmen Square inherited Japan's place as a rapidly growing, export-based economy, one defined by the continued pre-eminence of the Chinese Communist Party. The Maastricht Treaty was formulated, creating the structure of the subsequent European Union. A vast coalition dominated by the United States reversed the Iraqi invasion of Kuwait.

Three things defined the post-Cold War world. The first was U.S. power. The second was the rise of China as the center of global industrial growth based on low wages. The third was the re-emergence of Europe as a massive, integrated economic power. Meanwhile, Russia, the main remnant of the Soviet Union, reeled while Japan shifted to a dramatically different economic mode.

The post-Cold War world had two phases. The first lasted from Dec. 31, 1991, until Sept. 11, 2001. The second lasted from 9/11 until now.

The initial phase of the post-Cold War world was built on two assumptions. The first assumption was that the United States was the dominant political and military power but that such power was less significant than before, since economics was the new focus. The second phase still revolved around the three Great Powers -- the United States, China and Europe -- but involved a major shift in the worldview of the United States, which then assumed that pre-eminence included the power to reshape the Islamic world through military action while China and Europe single-mindedly focused on economic matters.

The Three Pillars of the International System

In this new era, Europe is reeling economically and is divided politically. The idea of Europe codified in Maastricht no longer defines Europe. Like the Japanese economic miracle before it, the Chinese economic miracle is drawing to a close and Beijing is beginning to examine its military options. The United States is withdrawing from Afghanistan and reconsidering the relationship between global pre-eminence and global omnipotence. Nothing is as it was in 1991.

Europe primarily defined itself as an economic power, with sovereignty largely retained by its members but shaped by the rule of the European Union. Europe tried to have it all: economic integration and individual states. But now this untenable idea has reached its end and Europe is fragmenting. One region, including Germany, Austria, the Netherlands and Luxembourg, has low unemployment. The other region on the periphery has high or extraordinarily high unemployment.

Germany wants to retain the European Union to protect German trade interests and because Berlin properly fears the political consequences of a fragmented Europe. But as the creditor of last resort, Germany also wants to control the economic behavior of the EU nation-states. Berlin does not want to let off the European states by simply bailing them out. If it bails them out, it must control their budgets. But the member states do not want to cede sovereignty to a German-dominated EU apparatus in exchange for a bailout.

In the indebted peripheral region, Cyprus has been treated with particular economic savagery as part of the bailout process. Certainly, the Cypriots acted irresponsibly. But that label applies to all of the EU members, including Germany, who created an economic plant so vast that it could not begin to consume what it produces -- making the country utterly dependent on the willingness of others to buy German goods. There are thus many kinds of irresponsibility. How the European Union treats irresponsibility depends upon the power of the nation in question. Cyprus, small and marginal, has been crushed while larger nations receive more favorable treatment despite their own irresponsibility.

It has been said by many Europeans that Cyprus should never have been admitted to the European Union. That might be true, but it was admitted -- during the time of European hubris when it was felt that mere EU membership would redeem any nation. Now, Europe can no longer afford pride, and it is every nation for itself. Cyprus set the precedent that the weak will be crushed. It serves as a lesson to other weakening nations, a lesson that over time will transform the European idea of integration and sovereignty. The price of integration for the weak is high, and all of Europe is weak in some way.

In such an environment, sovereignty becomes sanctuary. It is interesting to watch Hungary ignore the European Union as Budapest reconstructs its political system to be more sovereign -- and more authoritarian -- in the wider storm raging around it. Authoritarian nationalism is an old European cure-all, one that is re-emerging, since no one wants to be the next Cyprus.

I have already said much about China, having argued for several years that China's economy couldn't possibly continue to expand at the same rate. Leaving aside all the specific arguments, extraordinarily rapid growth in an export-oriented economy requires economic health among its customers. It is nice to imagine expanded domestic demand, but in a country as impoverished as China, increasing demand requires revolutionizing life in the interior. China has tried this many times. It has never worked, and in any case China certainly couldn't make it work in the time needed. Instead, Beijing is maintaining growth by slashing profit margins on exports. What growth exists is neither what it used to be nor anywhere near as profitable. That sort of growth in Japan undermined financial viability as money was leant to companies to continue exporting and employing people -- money that would never be repaid.

It is interesting to recall the extravagant claims about the future of Japan in the 1980s. Awestruck by growth rates, Westerners did not see the hollowing out of the financial system as growth rates were sustained by cutting prices and profits. Japan's miracle seemed to be eternal. It wasn't, and neither is China's. And China has a problem that Japan didn't: a billion impoverished people. Japan exists, but behaves differently than it did before; the same is happening to China.

Both Europe and China thought about the world in the post-Cold War period similarly. Each believed that geopolitical questions and even questions of domestic politics could be suppressed and sometimes even ignored. They believed this because they both thought they had entered a period of permanent prosperity. 1991-2008 was in fact a period of extraordinary prosperity, one that both Europe and China simply assumed would never end and one whose prosperity would moot geopolitics and politics.

Periods of prosperity, of course, always alternate with periods of austerity, and now history has caught up with Europe and China. Europe, which had wanted union and sovereignty, is confronting the political realities of EU unwillingness to make the fundamental and difficult decisions on what union really meant. For its part, China wanted to have a free market and a communist regime in a region it would dominate economically. Its economic climax has left it with the question of whether the regime can survive in an uncontrolled economy, and what its regional power would look like if it weren't prosperous.

And the United States has emerged from the post-Cold War period with one towering lesson: However attractive military intervention is, it always looks easier at the beginning than at the end. The greatest military power in the world has the ability to defeat armies. But it is far more difficult to reshape societies in America's image. A Great Power manages the routine matters of the world not through military intervention, but through manipulating the balance of power. The issue is not that America is in decline. Rather, it is that even with the power the United States had in 2001, it could not impose its political will -- even though it had the power to disrupt and destroy regimes -- unless it was prepared to commit all of its power and treasure to transforming a country like Afghanistan. And that is a high price to pay for Afghan democracy.

The United States has emerged into the new period with what is still the largest economy in the world with the fewest economic problems of the three pillars of the post-Cold War world. It has also emerged with the greatest military power. But it has emerged far more mature and cautious than it entered the period. There are new phases in history, but not new world orders. Economies rise and fall, there are limits to the greatest military power and a Great Power needs prudence in both lending and invading.

A New Era Begins

Eras unfold in strange ways until you suddenly realize they are over. For example, the Cold War era meandered for decades, during which U.S.-Soviet detentes or the end of the Vietnam War could have seemed to signal the end of the era itself. Now, we are at a point where the post-Cold War model no longer explains the behavior of the world. We are thus entering a new era. I don't have a good buzzword for the phase we're entering, since most periods are given a label in hindsight. (The interwar period, for example, got a name only after there was another war to bracket it.) But already there are several defining characteristics to this era we can identify.

First, the United States remains the world's dominant power in all dimensions. It will act with caution, however, recognizing the crucial difference between pre-eminence and omnipotence.

Second, Europe is returning to its normal condition of multiple competing nation-states. While Germany will dream of a Europe in which it can write the budgets of lesser states, the EU nation-states will look at Cyprus and choose default before losing sovereignty.

Third, Russia is re-emerging. As the European Peninsula fragments, the Russians will do what they always do: fish in muddy waters. Russia is giving preferential terms for natural gas imports to some countries, buying metallurgical facilities in Hungary and Poland, and buying rail terminals in Slovakia. Russia has always been economically dysfunctional yet wielded outsized influence -- recall the Cold War. The deals they are making, of which this is a small sample, are not in their economic interests, but they increase Moscow's political influence substantially.

Fourth, China is becoming self-absorbed in trying to manage its new economic realities. Aligning the Communist Party with lower growth rates is not easy. The Party's reason for being is prosperity. Without prosperity, it has little to offer beyond a much more authoritarian state.

And fifth, a host of new countries will emerge to supplement China as the world's low-wage, high-growth epicenter. Latin America, Africa and less-developed parts of Southeast Asia are all emerging as contenders.

Relativity in the Balance of Power

There is a paradox in all of this. While the United States has committed many errors, the fragmentation of Europe and the weakening of China mean the United States emerges more powerful, since power is relative. It was said that the post-Cold War world was America's time of dominance. I would argue that it was the preface of U.S. dominance. Its two great counterbalances are losing their ability to counter U.S. power because they mistakenly believed that real power was economic power. The United States had combined power -- economic, political and military -- and that allowed it to maintain its overall power when economic power faltered.

A fragmented Europe has no chance at balancing the United States. And while China is reaching for military power, it will take many years to produce the kind of power that is global, and it can do so only if its economy allows it to. The United States defeated the Soviet Union in the Cold War because of its balanced power. Europe and China defeated themselves because they placed all their chips on economics. And now we enter the new era.

70 comments:

Meanwhile, 21 million Chinese live below what the Communist Party calls the "absolute poverty" line. That sounds pretty good if you have in mind our poverty line, which is just under $11,000 per year for an individual and roughly $22,000 for a family of four. The absolute poverty rate in China is $90 a year, or $7.50 per month. And 35 million live on less than $125 per year. Hundreds of millions of Chinese live on $1 or $2 a day.

Michael Levy, who recently wrote a book on his stint as a Peace Corps worker in rural China (Yes, China still asks for Peace Corps help.) put it well in an interview with NPR: "Imagine that there's a country exactly like the United States. Exactly the same size. It's got the same cities. It's got the same number of rich people and poor people. It's just like us. And now add 1 billion peasants. That's China."

And yet that's the country President Obama insists we need to emulate.

In one sense we are facing the same issue we were facing in the 60's and 70's. After WWII, with the Marshall Plan we help get Europe up and running again. We did the same thing for Japan. All in all, it was one of the best investments we could have made in that it helped create a market for U.S. goods.

On the other hand, Europe and Japan started out with all new manufacturing equipment and infrastructure. The U.S. was able to keep up but it still created some significant competitors.

Back then, we at least had some fresh infrastructure such as the interstate system; but for the last forty years or so we have been eating the seed coin. Roads and bridges are falling apart and some municipal water systems have sections over a century old.

With poor infrastructure, although it is sometimes hard to see the negative effects, you will still feel them.

"America has 5,194 airports with paved runways (the only kind I use, how about you?). That's more than 11 times China's 442. In fact, you can add up the paved airports of the next 10 countries combined, and America beats them with more than a thousand airports to spare. We have nearly twice the roadways China does and almost three times the railways.

Ah, but China is investing in high-speed rail! Which, we are told, will help us win the future. Except China has, in the words of the London Financial Times, "slammed the brakes" on its high-speed rail program for a slew of safety and economic reasons.

Superior U.S. freight system

What people don't often mention is that we have the best freight system in the world (in Europe, they move people on rails and cargo on roads; we mostly do the opposite because we're so much more spread out). That's why Warren Buffett— the president's favorite billionaire — has invested massively in freight rail. Alas, switching to high-speed rail in the U.S. would seriously threaten the efficiency of our system."

It certainly not the Islamoids. They are an inconsequential group, in any rational view of global power projection. A more fragmented and unorganized coalition of a billion folk, there is not on this earth.

The best way to make the happen is to accelerate energy independence and use it to reestablish an industrial base in the Americas. Also, we have a tremendous opportunity to give out green cards to Europeans and anyone else in the Anglosphere that want to come to the US with $400,000 to invest. 11,000,000 of them would balance out the soon to be new immigration reform.

Ethanol Has Its Place, but Not in GasolineBy the Editors Apr 1, 2013 6:30 PM ET

.S. oil production has reached a 20-year high and, since March 2012, demand for gasoline has fallen almost 5 percent. So why have prices at the pump jumped? From mid-December through the end of February they rose almost 20 percent, though they have declined a bit in recent weeks. Some of the blame for the increase goes to the federal mandate on ethanol use in the U.S. fuel supply.

Fuel blenders are required to mix 13.8 billion gallons of ethanol with gasoline this year, under an energy bill passed in 2005 and revised two years later -- at a time before domestic energy production surged and motorists began using less gasoline.

Now, the fixed ethanol mandate could force blenders to make gasoline that’s more than 10 percent ethanol -- more than some cars are equipped to burn. Some automakers have said that using a mix of 15 percent ethanol, which the Environmental Protection Agency plans to order blenders to produce, might void engine warranties.

The solution for blenders is to buy credits, which give them a break on how much ethanol they must mix into the gasoline they sell. The price of credits has soared, however, reaching more than $1 a gallon in early March, after trading at just 7 cents in January.

Yep, and Rufus was telling you the truth. Ethanol is selling for $0.90/gal less than gasoline on the CBOT.

The Oil companies are going to have to sell some E85, and/or E15 to meet the mandates from here on out. The ones that prepared are in the catbird's seat, and are selling their RINS at a very nice profit to the ones that spent all their time, and energy fighting E15, and the Renewable Fuel Standard.

The article is arguing that the federal mandate is currently driving up the price of gas at the pump. It's a supply and demand issue. However, in this instance the supply for ethanol blends is mandated at the same time demand for gasoline and thus for gasoline blends is down. The RFS were set in 2007 at a period with peak usage of gasoline. Since then, for various reasons, gasoline usage is down. It's likely that over the next couple years, the mandate will contribute to higher prices at the pump.

Unless I misunderstand the situation, the RINS are aquired by the blenders when they blend a gallon of ethanol with gasoline; therefore the only Oil companies who could 'prepare' are those refiners who were also blenders. And while it is true to meet the mandate the Oil companies are going to have to sell more E85 and E15 to meet the mandate, you can't sell what people don't buy.

One man’s “relatively costly” insurance is, of course, another man’s “thank God, my insurance covers that” insurance. And it works the other way, too. One man’s relatively cheap insurance is another man’s endless fight with the insurance company because his plan, confusingly, didn’t cover his illness. Didn’t he read the super-fine print beneath the fine print?

That gets to the heart of what’s become a terribly confused debate over premiums in Obamacare. Vermont’s insurers didn’t have to change their products because their products were already very good. In other states, some of the insurance products will have to be upgraded, as they’re stingier. But Obamacare will help people pay for the better insurance. Comparing the two isn’t just comparing the cost of apples to the cost of oranges. It’s comparing the cost of apples to somebody taking you out to dinner.

Let’s say I work a job at a firm we’ll call Texas Inc. It’s an okay job. But the insurance they give me is crummy. It doesn’t cover any conditions I had before I took the job. The deductible is really high. The network is limited. The dentist they send me to is named “Dr. Nick” and he starts every appointment with a faintly accented, “Hi, everybody!” On the bright side, the premiums are low. But Texas Inc. doesn’t help me pay them.

But then I get a new job at Vermont, LLC. Their insurance plan is excellent! The network is expansive. They cover everything that’s wrong with me. The deductible is low. The doctors are the best in the area. And the premiums, consequently, are higher. But my employer pays half the cost — and so the total, out-of-pocket cost to me is lower.

Did my premiums just “go up”? Or did I switch to a better insurance plan?

For most people, this would be called switching to a better insurance plan. In fact, this is why employers offer good insurance in the first place: It helps them lure talented workers from companies that don’t offer good health benefits.

No, he didn't ignore consumers interests but he also didn't put them before Apple's interest - the two interests don't necessarily coincide.

A for profit company has no incentive to offer a cheaper more effective solution if it competes against a very profitable one that they offer - in fact they have a vested interest in suppressing the cheaper effective solution. business 101

If you want an example of Apple putting its interest before consumer interests take a look at profession video makers response to the discontinuation of Final Cut Pro series of apps in favor of Final Cut X. Amazingly Final Cut X will not load any of the legacy projects made in Final Cut Pro, much to the anger of the professional video community.

You could afford Apple Quality Care, the Rest of us would do just fine w/the less snazzy PC quality care like we have here.My wife received far less quality care than Jobs, and we all paid a terrible price, but no system is perfect, and if I could do it over again, she'd likely still be with us.

No system is perfect, but Obamacare is a Nightmarish Regulatory Mess.

Perhaps US citizens will be going to Canada for care if it could be arranged and they could afford it.

"In one sense we are facing the same issue we were facing in the 60's and 70's. After WWII, with the Marshall Plan we help get Europe up and running again. We did the same thing for Japan. All in all, it was one of the best investments we could have made in that it helped create a market for U.S. goods."

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The Marshall Plan was so shortsighted!

The Dougo Plan:

Nuke the Industrial Capacity of Germany, Russia, and China out of existence, trying to minimize deaths to maximize the number of useful Peasants to exploit.

China, on the other hand, seems less affected than us by the plateauing of global oil production in that they are increasing their imports by a half a million bbl/day per year, while We are cutting our usage by about the same amount.

Not all Venezuelans are impressed by the anti-violence rhetoric. Waiting outside the Caracas morgue for news of her nephew who had been shot and killed in the Caracas slum of Petare, Antonia Diaz said: “The government says it’s going to change things but we haven’t seen anything yet.

...

“The police do their job but they do it badly. The government needs to take responsibility for what is happening,” said Andres Verbosa, also part of the group representing the 26-year-old.

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The socialist candidate is imitating the former leader at every opportunity, copying his military dress style, rambling approach to speech-making, and his controversial political moves which have turned the election into one of the dirtiest Venezuela has witnessed.

The body of a missing North Carolina woman was found inside her wrecked car, three days after it was ordered by a state trooper to be towed away from the crash scene.

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An accident report filed Friday by N.C. Highway Patrol Trooper Marlon Williams shows her crashed 2000 Pontiac was found Friday morning in a deep ditch near Smithfield, about 30 miles southeast of Raleigh. Both air bags deployed.

2. Survival arrow fletching. Tear off a few 5-inch pieces, and a long edge of one piece to the arrow shaft, fold the tape lengthwise, and stick the other long edge of that piece to the arrow. Repeat this process one or two more times; trim the vanes to shape with your knife; and you will have a serviceable arrow fletching.

3. Butterfly bandage strips. Cut two small strips of DT, and add a smaller strip across their centers (sticky side to sticky side) to create a makeshift butterfly suture.

"The North Korean regime indulges in this kind of behaviour all the time," said Prof Shin Jong-dae of the University of North Korean Studies in Seoul. "The possibility of war breaking out is still very low, although there is always the chance of smaller skirmishes.

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The latest threats are in response to ongoing military drills involving forces from South Korea and the US – the US flew B-52 and B-2 bomber sorties over the Korean peninsula last week – and tougher UN sanctions imposed after Pyongyang's third nuclear arms test in February.

A spokesman for North Korea's bureau of atomic energy said the Yongbyon facilities are a graphite-moderated five-megawatt reactor, which generates spent fuel rods laced with plutonium and is the core of the Yongbyon nuclear complex. When fully operational the complex is capable of the annual production of one atomic bomb's worth of plutonium, the most common fuel in nuclear weapons.

Man of the World Mr. Obama recalled the opening lines of the Arabic call to prayer, reciting them with a first-rate accent. In a remark that seemed delightfully uncalculated (it’ll give Alabama voters heart attacks), Mr. Obama described the call to prayer as “one of the prettiest sounds on Earth at sunset.”

"The article is arguing that the federal mandate is currently driving up the price of gas at the pump. It's a supply and demand issue. However, in this instance the supply for ethanol blends is mandated at the same time demand for gasoline and thus for gasoline blends is down. The RFS were set in 2007 at a period with peak usage of gasoline. Since then, for various reasons, gasoline usage is down. It's likely that over the next couple years, the mandate will contribute to higher prices at the pump.

Unless I misunderstand the situation, the RINS are aquired by the blenders when they blend a gallon of ethanol with gasoline; therefore the only Oil companies who could 'prepare' are those refiners who were also blenders. And while it is true to meet the mandate the Oil companies are going to have to sell more E85 and E15 to meet the mandate, you can't sell what people don't buy. "

Even different blends of Gas often result in absurd prices....in California, totally unnecessary, in that climate.

Like trying to make already very clean vehicles way cleaner, w/o a realistic cost/benefit return.

With many times more traffic, the Los Angeles Basin is far less smoggy than it was in the '50's,

Among the many elements of the Dec. 14 shooting at a Newtown, Conn., elementary school that concerned gun-control advocates and state legislators was gunman Adam Lanza's deadly use of ammunition magazines that held 30 bullets.

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Connecticut is now poised to become the first state to require current owners of magazines with 10 or more rounds to register them.

The "Renewable Identification Number" (RIN) is issued by the biorefinery with the ethanol. The "Obligated Party" must come up with a certain amount of RINS, depending on the amount of gasoline sold, or face a heavy fine. The program was set up so that, initially, the "obligation" could be met simply by blending 10% ethanol in each gallon of gasoline, but that, eventually, the obligated party would have to sell some higher ethanol content blends.

It's as simple as installing, or in some cases helping customers to install, E85 or Blender pumps. This is the route that several obligated parties pursued. Others gambled on being able to defeat the Renewable Fuel Standard, either in court, or through political action. Those gambles failed.

That sent several obligated parties scrambling to buy RINS from other parties that had accumulated extra RINS. The RINS suddenly became very valuable.

However, the price at the pump (which, as I stated, is about $0.30/gal lower than last year when RINS were only a couple of cents) continued to be set by the Lowest Cost Providers (those that had accumulated excess RINS.) In fact, they have been able to price Their product lower, due to making a nice profit selling RINS.

It's quite likely that the shortage of RINS actually LOWERED the cost of gasoline this year.

It seems absurd to argue that the cost of gasoline is higher as a result of RINS, when gasoline is considerably cheaper than it was at this time last year when RINS were very cheap.

Your argument that "It's quite likely that the shortage of RINS actually LOWERED the cost of gasoline this year," is a reasonable argument to make; although, obviously, there are those that would argue the opposite (note the article).

Your argument that "It is absurd to argue that the cost of gasoline is higher as a result of RINS, when gasoline is considerably cheaper than it was at this time last year when RINS were very cheap," is silly, simplistic, and ignores the many factors that go into the price of gas at the pump at any given point in time.

For those RINS that are sold, they are being treated like a commodity and their price varies from day to day. In January, as I recall they were selling for a high of $1.06. A short time later they were selling for a price of $.70.

While you cannot talk about them as a determining variable in the price of gasoline, you can talk of their effect or projected effect on the price of gasoline regardless of the final price of that gasoline, up or down. That's what the article attempted to do.

The price of gasoline a year ago as well as the price of gasoline today were/is affected by a host of variable, supply and demand, the world price, where the gas is sold, the time of year, idle capacity at the refineries, RINS, geopolitical conditions, speculation, etc. In other words, there are many variables affecting gas prices with the cost of RINS just being one of them. Most of those variable are likely more important than the RINS in determining the final cost.

Therefore, although you can't argue that the total price of gasoline, up or down, at a point in time is the result of RINS price movement, you can argue that the price of gasoline at the pump, independent of the RINS, is affected positively or negatively by the price of RINS at that particular time.

Magnificent Ronald and the Founding Fathers of al Qaeda

“These gentlemen are the moral equivalents of America’s founding fathers.” — Ronald Reagan while introducing the Mujahideen leaders to media on the White house lawns (1985). During Reagan’s 8 years in power, the CIA secretly sent billions of dollars of military aid to the mujahedeen in Afghanistan in a US-supported jihad against the Soviet Union. We repeated the insanity with ISIS against Syria.